EXCL - Smooth sailing

KBVS Update
Friday, 16 February 2024

EXCL: Smooth Sailing
(Maintain BUY, with upgraded TP: IDR3,090)

-    EXCL's FY23 performance mostly in-line with ours/consensus estimates, arriving at 97.6%-106.5% thanks to solid operational metrics, demonstrated by strong top-line growth yoy at 11%.

-    Blended ARPU climbed to IDR45.8K/ sub in 4Q23 thanks to price adjustment carried out in Nov ’23 and growing high quality subs. Meanwhile, EXCL managed to maintain its subs number at 57.5mn in 4Q23

-    Nevertheless, EBITDA margin was slightly down to 47.5% in 4Q23 amid higher core cost due to S&M as well as infrastructure costs

-    EXCL expects to complete subs transfer from LINK and transformation by 2H24 as it is still subject of ongoing approval process. Should it be concluded, EXCL is on position to become one of the country's largest FBB players through its XL Home product

-    Management guides for high single digit growth in '24, which is in-line with our forecast on expectation of stabilized market competition. Furthermore, EBITDA margin is expected to approach c. 50% for ’24.

-    Maintain our BUY call with a target price of IDR3,090, 3.0x 2024F EV/EBITDA or above -1SD 5-year historical mean as we lift our revenue/EBITDA forecasts by 1.4-2.2% for ’24.

Regards,
Devi Harjoto – KBVS Research  Team